Taxation

I live off of savings, not employed, no mortgage, no debt etc.

I am 60. Obviously not receiving state pension (yet) and my employment pensions are not yet being drawn down.

I have 100K to invest.

I have no ISA's

I am of the understanding that as I have no income per se - I can invest the monies in the NS&I 6.2% bond, or ISA and as my tax code is therefore 12570.

So question is:
Can I put all my cash into the NS&I and with a tax code of £1257 +£5000 first int relief + £1K int free savings allowance, then I will not be taxed on any of my interest. My calculation is £6204 before tax interest @ a savings rate of 6.2% on £100K.

Any advise would be appreciated.
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Comments

  • molerat
    molerat Posts: 31,543
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    edited 2 October 2023 at 1:38PM
    Yes.  Your savings interest is set against your personal allowance first followed by the £5K starter rate for savings and lastly the £1K personal savings allowance so a total of £18570.
    Have you thought about taking advantage of paying £2880 in to a SIPP and taking out £3600 with £2700 of that being taxable but set against your unused allowance, an easy £720 free money ?

  • 'Are you taking advantage of paying £2880 in to a pension and taking out £3600 with £2700 of that being taxable but set against your allowance, an easy £720 free money ?'

    Not aware of that at all - any particular pension or any reccommendation?

    Thank you

  • molerat
    molerat Posts: 31,543
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    edited 2 October 2023 at 1:52PM
    There are a few available but I personally use HL. There are no fees and interest is paid on the account balance which is taxed as per the pension rules on withdrawal.  It is easy to do and people here will talk you through the nuances of avoiding paying and having to reclaim any tax.  There is a long running thread in the pensions forum on the subject (which I can't seem to find :s ).
  • xylophone
    xylophone Posts: 43,837
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    Obviously not receiving state pension (yet) and my employment pensions are not yet being drawn down.

    Have you obtained a state pension forecast? What exactly does it say?

    https://www.gov.uk/check-state-pension


  • xylophone
    xylophone Posts: 43,837
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    There is a long running thread in the pensions forum on the subject (which I can't seem to find

    https://forums.moneysavingexpert.com/discussion/5580163/paying-2880-into-pension-when-retired/p133

  • xylophone said:
    Obviously not receiving state pension (yet) and my employment pensions are not yet being drawn down.

    Have you obtained a state pension forecast? What exactly does it say?

    https://www.gov.uk/check-state-pension


    £886.38 / month
  • [Deleted User]
    [Deleted User] Posts: 0
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    edited 2 October 2023 at 5:57PM
    xylophone said:
    Obviously not receiving state pension (yet) and my employment pensions are not yet being drawn down.

    Have you obtained a state pension forecast? What exactly does it say?

    https://www.gov.uk/check-state-pension


    £886.38 / month
    £886.38 every four weeks?
  • Dazed_and_C0nfused
    Dazed_and_C0nfused Posts: 12,748
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    edited 22 January at 2:51PM
    xylophone said:
    Obviously not receiving state pension (yet) and my employment pensions are not yet being drawn down.

    Have you obtained a state pension forecast? What exactly does it say?

    https://www.gov.uk/check-state-pension


    £886.38 / month
    £886.38 every four weeks?
    Sadly State Pension forecasts on gov.uk refer to a monthly amount despite State Pension never actually being paid monthly 🙄.

    I suspect that's what the op is referring to.
  • SiliconChip
    SiliconChip Posts: 1,272
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    edited 22 January at 2:51PM
    xylophone said:
    Obviously not receiving state pension (yet) and my employment pensions are not yet being drawn down.

    Have you obtained a state pension forecast? What exactly does it say?

    https://www.gov.uk/check-state-pension


    £886.38 / month
    £886.38 every four weeks?
    Sadly State Pension forecasts on gov.uk refer to a monthly amount despite State Pension never actually being paid monthly 🙄.

    I suspect that's what the op is referring to.

    But it also refers to weekly and annual amounts, despite not being paid at those intervals either. If you need to know the 4-weekly amount its pretty easy to multiply the weekly amount by 4. I haven't redone mine recently but I imagine £886.38 per month equates to the maximum.
  • molerat said:
    There are a few available but I personally use HL. There are no fees and interest is paid on the account balance which is taxed as per the pension rules on withdrawal.  It is easy to do and people here will talk you through the nuances of avoiding paying and having to reclaim any tax.  There is a long running thread in the pensions forum on the subject (which I can't seem to find :s ).
    Can I open one of these and use any previous years whereby I haven't had one or any pension contributions anywhere?
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